Payment processing

The U.K. retailer Marks & Spencer PLC is using card management software from S1 Corp. to manage its gift card program, the banking technology provider said Monday.

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Sanjay Sakhrani, an analyst at KBW Inc.'s Keefe, Bruyette & Woods Inc., trimmed his profit estimates for MasterCard Inc. after it reported second-quarter results that he said showed "some slowing in the U.S."

Heartland Payment Systems Inc. says that a marketing agreement with a group of school identification-card providers will help it boost sales of its campus payment card systems to small and midsize schools.

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Visa Inc. and MasterCard Inc., thriving despite challenging economic conditions, are looking at money transfers as one way to stay that way in a fast-changing payment industry.

Visa Inc. and MasterCard Inc. posted double-digit revenue increases last quarter as nondiscretionary spending on cards cushioned the effects of the U.S. consumer slowdown and international and cross-border volumes continued to exhibit healthy growth.

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German consumers buying goods and services online will pay with something other than a credit card for about 66% of such purchases, according to a report released Wednesday by Germany-based acquirer and payment-services firm Pago eTransaction Services GmbH. By contrast, consumers from other regions around the world use credit cards for 90% of online purchases. Pago based the report on analyses of some 30 million purchases the company processed between October 2006 and September 2007. The report also shows how much better British online merchants are than their counterparts in other countries in attracting international customers. British online merchants attract about 55% of their customers from outside the United Kingdom. One-third of those non-British consumers come from outside Europe, Pago says. By contrast, German online merchants see fewer than 5% of online purchases from customers outside Germany. Of those international customers, 0.8% come from outside Europe. "This could be a result of the language barrier," Pago says in a news release, noting that English is "understood by a majority of e-commerce consumers." Consumers in Germany and the UK show the most enthusiasm for online shopping, followed by those in France and Ireland, the report says.

Metavante Technologies Inc. announced yesterday it has created CustomPay for National Payment Network Inc., an El Segundo, Calif.-based company that creates loan acceleration products for auto companies. The product enables consumers to reschedule car-loan payments and can help those who have fallen behind on loans repay their debts more quickly than the terms of the original loan, Jeff Lewis, president of Metavante's ePayment Solutions division, tells CardLine. "It brings in the discipline that the consumer normally wouldn't apply to help them pay off the loan faster," Lewis says. While Metavante created the program at National Payment Network's request, it has considered offering a similar product to other companies, Lewis says. CustomPay works by combining Metavante's prepaid-processing, online bill-payment and automated clearing house systems, Lewis says. CustomPay customers sign up to have part of their payroll automatically deducted and set aside to pay their car loan, Lewis says. Milwaukee-based Metavante's ACH system moves the funds, which are held in a prepaid account, and the lender is paid through Metavante's bill-payment system, Lewis says. Companies also can use the product for mortgages and other types of long-term loans, Lewis says. CustomPay benefits lenders because borrowers are more likely to pay off their loans using the product. It benefits consumers because they pay the principal on the loan down more quickly because they make payments from every paycheck, so they pay less interest, Lewis says.

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While operators of transit fare-collection systems in London, New York, Washington, D.C., and a few other places consider enabling riders to pay fares with contactless cards issued by banks, no similar push to accept open-loop payment cards exists at the pioneering Octopus Cards Ltd. scheme in Hong Kong, according to one executive. Octopus, one of the largest fare-collection systems in the world, has been building its system and brand since 1997, and more cardholders are using the cards to make retail purchases, says Brian Chambers, head of Octopus Knowledge, the consulting arm of the holding company that owns the Hong Kong transit card scheme. "What's the effect of losing your brand, losing your customer relationship?" Chambers tells CardLine Global sister publication Cards&Payments. Octopus and Citibank earlier this month announced the planned launch of the first co-branded credit card that carries the Octopus application. But that application is separate from the Citi credit feature. Octopus estimates it has 17 million cards in circulation that cardholders use more than 10 million times each day. The transactions total more than HK$85 million (US$10.9 million euros or 6.9 million euros) per day. While estimates vary on the share retail and other nontransit transactions make up, Chambers places it at 30% of the total value cardholders spend with the prepaid Octopus cards. He says about 2,500 merchant locations accept Octopus. Those are part of roughly 50,000 terminals where users can tap their cards to pay, most of them on buses and at gates of subways, ferries and other modes of transport throughout Hong Kong. All of these terminals would have to be modified to accept payment from contactless debit, credit and prepaid cards from Visa Inc. or MasterCard Worldwide. "The cost of retrofitting would be enormous," Chambers says. The transit system or its banking partners also would have to update their back-end systems to calculate the variety of fares and discounts that transit operators offer customers who use bankcards. Chambers says he does not believe banks are interested in capturing the "micropayments" that transit fare collection represents.

Following its purchase of a 51% stake in HSBC Holdings PLC's U.K. merchant acquiring business, Global Payments Inc. has a "strong" appetite for acquisitions, according to Paul R. Garcia, its chairman, president, and chief executive.

Western Union Co. said Friday that it is appealing a court ruling this month allowing Arizona to seize remittances sent to Mexico from other states.

Merchant acquirers would have to report their retailers' credit and debit card transactions to the Internal Revenue Service as part of a provision of the Housing and Economic Recovery Act of 2008. The Senate on Saturday passed the bill, which the House passed last week. The bill awaits President Bush's signature to become law. "Acquirers will need to give the IRS a complete record of retailers' credit card and debit card activity so the IRS can learn more about unreported sales," says Paul Martaus, president of Mountain Home, Ark.-based consulting firm Martaus & Associates. Acquirers and the independent sales organizations with which they work would need to collect and securely store merchants' information, adds Martaus. Under the provision, a merchant acquirer annually would have to submit the name, address, taxpayer identification number, and the gross amount of credit and debit card transactions for each of its merchant customers. The reporting would begin after Dec. 31, 2010, according to the legislation. The provision could create "serious problems" for the acquiring industry, says Carla Balakgie, CEO of the Washington, D.C.-based Electronic Transactions Association.

Co-op Financial Services will provide EFT processing and ATM check imaging for

The Payment Card Industry Standards Council has added unattended payment

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